Real_Estate_BoomPresident of the Real Estate Institute of Western Australia, David Airey, has welcomed the decision by the state government to maintain the stamp duty exemption for first home buyers but said he was disappointed by changes to the First Home Owners Grant (FHOG).
“Maintaining the stamp duty exemption for first home buyers is a huge saving to many people, but slanting the FHOG towards new construction and away from established dwellings will not produce the outcome the government is expecting,” Mr Airey said.
The Treasurer adjusted the FHOG from $7,000 to $3,000 for the 70 per cent of people who purchase an existing dwelling.
New-builds will receive a boost of $3,000 to a grant of $10,000.
In defending the policy shift Premier Barnett said it would help stimulate construction and provide more homes.
“That argument is not supported by any evidence from over east where other states have already gone down a similar path,” Mr Airey said.
“Building a new home is a lifestyle decision that around 30 per cent of first home buyers are attracted to.  It is not a decision based on cost.
“The policy shift in the application of FHOG is unlikely to have any impact on boosting construction,” Mr Airey said.
Mr Airey said that, more importantly, the building industry didn’t need any stimulus and was currently flat-out meeting existing demand.
“Data from the Office of State Revenue show that for the June quarter, first home buyer applications for new-builds jumped by 36 per cent on the March quarter.”
“Grant applications from first home buyers increased from 1,522 in the March quarter to 2,075 in late July, reaching their highest level since September 2009,” Mr Airey said.
However, Mr Airey took aim at the 12.5 per cent increase in land tax for other owners, saying that owners were frustrated with increasing bills.
“This is a kick in the shins for property investors who supply two thirds of rental stock in WA. It will suck an extra $73 million out of their pockets as a punishment for being an investor.
The budget’s projected land tax revenue in 2013-14 is $657 million and is projected to raise an extra $338 million over the forward estimates.
“These owners already pay rates to local government for the provision of services yet get nothing from the state directly and subsidise government services which benefit the entire community.
“It's a great concern that the government remains so dependent on property taxes to run the state despite the enormous revenue earnings from resources,” Mr Airey said.
(source: Reiwa)